Sadara announces financial close for main financing

MOSCOW (MRC) -- Sadara Chemical Company has announced financial close for the funding of main financing of approximately USD10.5 billion project, said Arabnews.

This marks the completion of project financing for Sadara, which is a joint venture between the Saudi Arabian Oil Company (Saudi Aramco) and the Dow Chemical Company.

The main financing supplements the USD2 billion raised through a sukuk issuance in April, bringing the total Sadara project financing raised to approximately USD12.5 billion, the "largest project financing ever in the Middle East."

The Sadara chemical complex now being built in the Jubail Industrial City II of Saudi Arabia is described as the world’s largest to be built in a single phase. Comprising 26 world scale manufacturing units, the complex will be the first in the Middle East to use refinery liquids, such as naphtha, as feedstock.

By using best-in-class technologies to crack refinery liquid feedstock, Sadara will enable many industries that either currently do not exist in Saudi Arabia or only exist through raw material imports.

Sadara will introduce new specialty chemical plants and businesses as well as new value chains to complement the Kingdom’s existing chemicals landscape. Sadara is on track to deliver its first products in the second half of 2015, with the complex in full operation by 2016.

Located next to the Sadara complex, PlasChem Park is a collaborative effort between Sadara and the Royal Commission for Jubail and Yanbu. It will be an accelerator for the Kingdom’s drive to create more value in the downstream sector.

PlasChem Park will create unprecedented conversion industry investment and thousands of sustainable jobs, making a positive and enduring impact on the Saudi economy. As of now, Sadara has hired more than 1,500 people, a vast majority of them Saudi nationals.
MRC

MOSCOW (MRC) -- China will see a new round of PP and PE capacities coming online in the very near term, said Plastemart.

By the end of the summer, a total capacity of 850,000 tpa for PP and 1.2 mln tpa for PE is slated to come online in China. Wuhan Petrochemical, a joint venture between SK Group and Sinopec, began test runs at its PP and PE plants in Wuhan City, Hubei in mid-June while commercial runs are scheduled to be reached later in July, said players in China. The producer has a PP plant with a capacity of 400,000 tpa and two PE plants for HDPE and LLDPE, each with a capacity of 300,000 tpa. Players in the country also reported that Sichuan Petrochemical started test runs at its 450,000 tpa PP plant in early June. The company had delayed the start-up of its 600,000 tpa PE unit to July, according to reports in May.

Earlier this year, Guangzhou Petrochemical was also reported to be planning a start-up at its 200,000 tpa PP plant in Gungdong Province by July while Qilu Petrochemical was planning to start up its 200,000 tpa HDPE plant in the first quarter of this year and commenced test runs on June 10. However, no further updates have been released so far about these plants.

When looking at the recent situation in China’s PP and PE markets, import offers from overseas producers have started to be revealed with increases for July recently. Producers mostly blame firm upstream costs as well as their limited availability for their increase targets even though demand is widely considered unsatisfactory. "The recent softening in crude oil and LLDPE futures prices along with concerns regarding the new PP capacities are causing hesitation among buyers, resulting in limited buying interest," a distributor said.
MRC

MOSCOW (MRC) -- BP has written to lawyers of claimants arising from the 2010 Deepwater Horizon oil spill in the United States Gulf of Mexico, warning them that BP could seek to recover some of the payments if they prevail in a legal appeal, said Hydracarbonprocessing.

BP has also taken out full page advertisements in the main United States newspapers, including the New York Times and the Wall Street Journal, saying that the interpretation of the settlement they agreed last year has resulted in payments to businesses that didn't suffer losses from the oil spill.

Last year, BP agreed a settlement with the plaintiffs' steering committee, a group representing individuals with economic, property or medical damage claims. The settlement was originally estimated at USD7.8 billion.

But the costs have escalated because average payments for business economic loss claims have been higher than anticipated.

In April, BP said that the total estimated cost of the PSC settlement will be "significantly higher" than its current estimate of USD8.2 billion because business economic loss claims not yet received or processed are not reflected in the estimate and the average payments per claim so far are higher than anticipated.

The latest escalation in the cost of the disaster, which killed 11 men and triggered the worst offshore oil spill in United States history, comes as the company is embroiled in a civil trial to determine environmental fines that could total as much as USD17.6 billion.

BP has previously challenged the spill claim fund's process for handing out money, saying in court filings that the administrator has approved "fictitious awards" to some businesses and overestimated the losses of many claimants.

A BP spokesman said that although the company was actively litigating the payments by the claims program "for inflated and even fictitious losses" it remained fully committed to paying legitimate claims due to the accident.

BP said in the advertisement that ran in the papers that it has already paid out over USD25 billion in response, including clean up and restoration costs and in payments on claims made by individuals, businesses and governments for the 2010 disaster.

BP has spent or provisioned more than USD40 billion for the Deepwater Horizon disaster.

Last week, BP called for an independent investigation of the process used to compensate business for the losses, following reports that a lawyer working for the claims administrator had been suspended for alleged misconduct.

The company was responding to an Associated Press report, which said that a lawyer working for the court appointed administrator had been accused of collecting a portion of settlement payments referred to a New Orleans law firm.
MRC

MOSCOW (MRC) -- Russian Federal Anti-Monopoly Service will support bid of Rosneft to buy out its partner in gas firm Itera, FAS Chief Igor Artemev was quoted as saying by Russian newswires, said Hydracarbonprocessing.

"I'm sure we'll support the application," he said, Interfax and Prime news agencies reported.

Rosneft last fall acquired a 51% stake in Itera, seeking to expand its position as a gas producer.

Rosneft is now buying the remaining 49% from businessman Igor Makarov and his partners. Rosneft has not commented on the reported bid.

Rosneft became the world's largest listed crude oil producer in March after acquiring TNK-BP in deals worth around USD60 billion.

Rosneft is the leader of Russia’s petroleum industry, and ranks among the world’s top publicly traded oil and gas companies. The Company is primarily engaged in exploration and production of hydrocarbons, production of petroleum products and petrochemicals, and marketing of outputs.
MRC

MOSCOW (MRC) -- North American polypropylene supplies will be further tightened after Pinnacle Polymers declared force majeure on PP production at its plant in Garyville, La, said Plasticsnews.

Declaring force majeure "will impact our ability to fulfill orders," Pinnacle President Mark Knorr said in a June 24 letter to customers.

The situation "is the result of an interruption in the normal supply of [propylene] monomer to our plant from multiple sources," he added. "We are unable to calculate the impact of this interruption at this time."

Garyville-based Pinnacle operates about 800 million pounds of annual PP capacity at its plant there.
The announcement comes just a few weeks after Formosa Plastics Corp. USA declared force majeure at its PP operations in Point Comfort, Texas. Formosa officials cited only "unplanned outages" as a reason for their firm’s action.

As MRC wrote before, Pinnacle Polymers LLC, a major polypropylene (PP) manufacturer based in Ridgefield, Conn., has reached new heights of aesthetics and quality by upgrading to Millad NX8000 technology from Milliken Chemical, a division of Milliken & Company.
MRC